31/07/2008

Centrica Posts £1 Million In Profits - To Consumers Anger

British Gas owner Centrica has posted half-year profits of almost £1 billion - much to the anger of consumer groups.

Centrica maintain that it has been "absolutely necessary" to raise household gas prices as profits were down 20% in the first six months of this year to £992 million - down from £1.23 billion in 2007.

The firm has instead blamed higher wholesale gas prices on household gas price hikes.

On Wednesday, British Gas raised gas tariffs by 35% and electricity by 9%.

Chief Executive of Centrica, Sam Laidlaw, said: "We produced a good set of results in tough market conditions and against a record first of 2008 and beyond we will continue to concentrate on improving customer service in British Gas, driving inefficiencies out of our entire business, moving in a disciplined manner towards a greater level of vertical integration and pursuing value-adding growth opportunities in all of our business."

British Gas Managing Director, Phil Bentley, told the BBC that "the price of gas this winter, even though it's fallen a little bit, it's still double what was last year".

MP's have warned that higher energy prices will have "serious consequences" for millions of households.

Following Centrica's results, a group of council leaders have said energy suppliers should be charged an annual £500m 'windfall' fee to help beat fuel poverty and cut carbon emissions.

Campaigns Director for Energywatch, Adam Scorer, said householders would be "staggered at the rude health of Centrica's half year profits".

"Obviously, almost a billion pounds of profit in six months isn't the sort of profit Centrica wanted so it has raised gas prices by 35%. Consumers would love to be able to affect their bottom line so easily.

"The bottom line for consumers makes for very grim reading. The £1,000 a year energy bill ceiling is well and truly breached.

"Numbers in fuel poverty will explode this year. Households have some hard decision to make about stretched budgets."

Mr Scorer added that "if the era of cheap energy is over, then the era of cheap solutions to fuel poverty is over as well. Government will fail to meet its fuel poverty target for 2010."

Britain's other energy suppliers are expected to follow suit due to sky rocketing raw fuel costs.

Citigroup analyst Peter Atherton said he expected "all UK retail energy suppliers to announce retail tariff increases of around 25% before the end of September".

Centrica share prices currently stand at 312.25 pence.

Meanwhile, Uswitch.com, an impartial online switching service, is offering consumers a saving £325 a year if they join them.

(DS)(BMcC)

Related UK National News Stories
Click here for the latest headlines.

04 February 2010
Energy Supplier Slashes Gas Price
British Gas has today cut its standard gas prices by an average 7%. The price cut, which will benefit 8 million households, takes effect immediately and makes British Gas, on average, the cheapest supplier of standard gas and electricity right across Britain - no matter which way customers choose to pay.
24 June 2005
Gas prices could rise again
British Gas has warned customers that gas prices could be increased again. Centrica, which owns British Gas, said that the price rises were being introduced because of expectations of an increase in wholesale prices. The price rises would follow a 12.4% increase in September last year and a further rise of 5.9% in January.
12 May 2008
Centrica To Hike Gas Prices Again
Centrica, the owner of British Gas, has warned households of a potential further 30% rise in gas bills by next winter. The company said its Group operating profit for the first half of the year will be materially lower than the first half of 2007.
27 July 2006
Energy bills set to rise again
British Gas owner Centrica has announced plans to increase energy bills from September. Centrica announced that gas bills would increase by 12.4%, while electricity bills would rise by 9.4%. British Gas blamed the "unprecedented" rise in the cost of wholesale energy costs for the latest rise.
26 August 2014
200 Homes Still Without Gas After Water Leak
Around 200 homes in Wales are still without gas after a burst water pipe flooded gas lines last Thursday. Wales and West Utilities have said that some 150,000 litres of water has been pumped from gas pipes since last Thursday, with 540 of the 755 homes affected by the leak, now reconnected.